<PAGE>

                                                                  EXHIBIT 10.1

                     PLASMA & MATERIALS TECHNOLOGIES, INC.
                             1991 STOCK OPTION PLAN

     SECTION 1.  Description of Plan.  This is the 1991 Stock Option Plan (the
"Plan") of Plasma & Materials Technologies, Inc., a California corporation (the
"Company"). Under the Plan, employees, directors, consultants and advisors of
the Company or any of its Subsidiaries, to be selected as set forth below, may
be granted options ("Options") to purchase shares of the Common Stock of the
Company ("Common Stock"). For purposes of the Plan, the term "Subsidiary" means
any corporation 50% or more of the voting stock of which is owned by the Company
or by a Subsidiary of the Company. It is intended that the Options under the
Plan will either qualify for treatment as incentive stock options under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") and be
designated Incentive Stock Options, or not qualify for such treatment and be
designated Nonqualified Stock Options.

     SECTION 2.  Purpose of this Plan.  The purpose of the Plan and of granting
options to employees, directors, consultants and advisors is to further the
growth, development and financial success of the Company and its subsidiaries by
providing additional incentives to such persons by assisting them in acquiring
shares of Common Stock and to benefit directly from the Company's growth,
development and financial success.

     SECTION 3.  Eligibility.  The persons who shall be eligible to receive
grants of Options under the Plan shall be the employees, directors, consultants
and advisors of the Company or any of its Subsidiaries. A person who holds an
Option is herein referred to as a "Participant." More than one Option may be
granted to any one Participant. Notwithstanding the foregoing, no Incentive
Stock Option may be granted to any person who then owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or of a Subsidiary unless (a) the Option Price (as hereinafter defined)
is at least 110% of the fair market value of the Common Stock on the date of
grant, and (b) the termination date of such Option is not later than five years
after the date such Option is granted. For this purpose, a person's stock
ownership is determined using the constructive ownership rules contained in Code
Section 424(d).

     Only employees of the Company or a Subsidiary may be granted Incentive
Stock Options under the Plan.  The exercise of an Incentive Stock Option will
not qualify for favorable income tax treatment unless the Participant remains an
employee of the Company or a Subsidiary at all times during the period beginning
on the date of the grant of the Incentive Stock Option and ending on the date
three months before the date of the exercise of the Incentive Stock Option.  For
this purpose, a Participant who is on a leave of absence that exceeds ninety
days will be considered to have terminated his employment on the ninety-first
day of the leave of absence, unless the Participant's rights to reemployment are
guaranteed by statute or contract.  However, a Participant will not be
considered to have incurred a termination of employment because of a transfer of
employment between the Company and a Subsidiary (or vice versa).

     The aggregate fair market value (determined as of the time an Option is
granted) of the Common Stock for which any Participant may be granted Incentive
Stock Options first exercisable in any calendar year under the Plan and any
other incentive stock option plans (which qualify under Section 422 of the Code)
of the Company or any Subsidiary shall not exceed $100,000.

     SECTION 4.  Administration.  This Plan shall be administered by the Board
of Directors of the Company or a committee thereof (in either case, the
"Board"). The Board shall be composed of individuals who qualify under Rule 16b-
3 promulgated by the Securities and Exchange Commission and under Code Section
162(m).

     The Board is authorized and empowered to administer the Plan and, subject
to the Plan, (a) to select the Participants, to specify the number of shares of
Common Stock with respect to which Options are granted to each such Participant,
to specify the Option Price (as hereinafter defined) and the terms of Options,
and in general to
<PAGE>
 
grant Options; (b) to determine, subject to the limits of Section 3 hereof,
whether Options will be Incentive Stock Options or Nonqualified Stock Options;
(c) to determine the dates upon which Options shall be granted and to provide
for the terms and conditions of the Options in a manner consistent with this
Plan, which terms and conditions need not be identical as to the various Options
granted; (d) to interpret the Plan; (e) to prescribe, amend and rescind rules
relating to the Plan; and (f) to determine the rights and obligations of
Participants under the Plan.  The interpretation and construction by the Board
of any provision of the Plan or of any Option granted thereunder shall be final.
No member of the Board shall be liable for any action or determination made in
good faith with respect to the Plan or any Option granted under it.

     SECTION 5.  Shares Subject to the Plan.  The number of shares of Common
Stock which may be purchased pursuant to the exercise of Options granted under
the Plan shall be 1,300,000 shares; provided, however, that such number shall be
increased to 2,400,000 shares upon, and subject to the occurrence of, the
closing contemplated by that certain Share Purchase Agreement dated as of July
17, 1996 among PMT, Electrotech Limited and Electrotech Equipments Limited
(collectively, "Electrotech") and the shareholders of Electrotech pursuant to
which PMT acquires all of the outstanding capital stock of Electrotech.  Such
number shall in any event be adjusted to reflect all stock splits, stock
dividends or similar capital changes.  Upon the expiration or termination for
any reason of an outstanding Option which shall not have been exercised in full,
any shares of Common Stock then remaining unissued which shall have been
reserved for issuance upon such exercise shall again become available for the
granting of additional Options under the Plan.  The maximum number of shares
that may be issued to any Participant shall be 500,000.  For this purpose, an
Option granted to a Participant shall be continued to be outstanding despite its
cancellation, and the repricing of an Option shall be treated as the grant of a
new option.

     SECTION 6.  Option Price.  The purchase price per share (the "Option
Price") of the shares of Common Stock underlying each Option shall be determined
in each case by the Board with respect to each specific Option but shall not be
less than the fair market value of such shares on the date of grant.  In the
event that the Company acquires another entity, the Board may authorize the
issuance of Options ("Substitute Options") to the individuals performing
services for the acquired entity in substitution of stock options previously
granted to those individuals in connection with their performance of services
for such entity upon such terms and conditions as the Board shall determine,
taking into account the conditions of Code Section 424(a) in the case of a
Substitute Option that is intended to be an Incentive Stock Option.

     SECTION 7.  Exercise of Options.  Subject to all other provisions of the
Plan, each Option shall be exercisable for the full number of shares of Common
Stock subject thereto, or any part thereof, in five equal cumulative annual
installments commencing one year after the date of grant (provided the
Participant is employed by the Company at the time of vesting), or in such other
installments and at such other intervals as the Board may in any specific case
or cases otherwise specifically determine in granting such Option. Each Option
shall terminate and expire, and shall no longer be subject to exercise, ten
years after the date of grant thereof, or at such earlier date as the Board may
otherwise specifically determine in granting such Option. The Option shall be
exercised by the Participant by giving written notice to the Company specifying
the number of full shares to be purchased and accompanied by payment of the full
purchase price therefor in cash, by check or in such other form of lawful
consideration (including promissory notes or shares of Common Stock then held by
the Participant) as the Board may approve from time to time.

     SECTION 8.  Option.  Each Option granted under the Plan shall be evidenced
by a written stock option executed by the Company and delivered to the
Participant, which shall be substantially in the form attached as Exhibit A
hereto, or shall be in such other form as specified by the Board. Such stock
option shall indicate whether such Option is to be an Incentive Stock Option or
a Nonqualified Stock Option and, if an Incentive Stock Option, shall contain
terms and conditions permitting such Option to qualify for treatment as an
incentive stock option under Section 422 of the Code.

                                       2
<PAGE>
 
     SECTION 9.  Issuance of Common Stock. The Company's obligation to issue
shares of Common Stock upon the exercise of an Option is expressly conditioned
upon the making of such investment representations and related undertakings by
the Participant (or his legal representative, heir or legatee, as the case may
be) in order to comply with the requirements of any exemption from any
securities law registration or other qualification of such shares which the
Company in its sole discretion shall deem necessary or advisable. Such required
representations and undertakings may include representations and agreements that
such Participant (or his legal representative, heir or legatee): (a) is
purchasing such shares for investment and not with any present intention of
selling or otherwise disposing thereof; and (b) agrees to have placed upon the
face and reverse of any certificates evidencing such shares a legend setting
forth (i) any representations and undertakings which such Participant has given
to the Company or a reference thereto, and (ii) that, prior to effecting any
sale or other disposition of any such shares, the Participant must furnish to
the Company an opinion of counsel, satisfactory to the Company and its counsel,
to the effect that such sale or disposition will not violate the applicable
requirements of state and federal laws and regulatory agencies.

     SECTION 10.  Nontransferability.  No Option shall be assignable or
transferable except by will or by the laws of descent and distribution.  During
the lifetime of a Participant, any Option granted to him shall be exercisable
only by him.  After the death of a Participant, the Option granted to him may be
exercised, prior to its termination as provided by Section 13(b), only by his
legal representative, his legatee or by any other person who acquired the right
to exercise the Option by reason of the death of the Participant.

     SECTION 11.  Recapitalization, Reorganization, Merger or Consolidation.  If
the outstanding shares of Common Stock of the Company are increased, decreased
or exchanged for different securities through reorganization, merger,
consolidation, recapitalization, reclassification, stock split, stock dividend
or like capital adjustment, a proportionate adjustment shall be made (a) in the
aggregate number of shares of Common Stock which may be issued pursuant to the
exercise of Options under the Plan, as provided in Section 5, and (b) in the
number, price and kind of shares subject to any outstanding Option granted under
the Plan.

     Upon the dissolution or liquidation of the Company or upon any
reorganization, merger or consolidation in which the Company does not survive,
the Plan and each outstanding Option shall terminate; provided that in such
event:  (a) each Participant to whom no Option has been tendered by the
surviving corporation in accordance with all of the terms of clause (b)
immediately below shall have the right until five days before the effective date
of such dissolution or liquidation, or such merger or consolidation in which the
Company is not the surviving corporation, to exercise in whole or in part any
unexpired Option or Options issued to him, without regard to the installment
provisions of Section 7 of the Plan or any option agreement; or (b) in its sole
and absolute discretion, the surviving corporation may, but shall not be so
obligated, tender to any Participant holding an Option, an option or options to
purchase shares of the surviving corporation, and such new option or options
shall contain such terms and provisions as shall be required to preserve
substantially all of the rights and benefits of any Option then outstanding
under the Plan.  Each Participant shall be given written notice by the Company
of any such proposed or contemplated dissolution, liquidation, reorganization,
merger or consolidation at least thirty-five (35) days prior to the effective
date thereof, which notice shall advise such Participant of the proposed
dissolution, liquidation, reorganization, merger or consolidation and the rights
of the Participant pursuant to this paragraph.

     To the extent that the foregoing adjustments relate to stock or securities
of the Company, such adjustments shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive.  Except as hereinbefore
expressly provided in this Section 11, the Participant shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class or
the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class, and the number or price of shares of
Common Stock subject to any Option shall not be affected by, and no adjustment
shall be made by reason of, any dissolution, liquidation, reorganization, merger
or consolidation, or any issue by the Company of shares of stock of any class,
or rights to purchase or subscribe for stock of any class, or securities
convertible into shares of stock of any class.

                                       3
<PAGE>
 
     The grant of an Option pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications or changes
in its capital or business structures or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or assets.

     SECTION 12.  Rights as a Shareholder.  A Participant holding an Option, or
a transferee of an Option, shall have no rights as a shareholder with respect to
any shares covered by his Option until the date of the issuance of a stock
certificate to him for such shares, and no adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as expressly provided in
Section 11.

     SECTION 13.  Termination of Options.  Each Option granted under the Plan
shall set forth a termination date thereof, which date shall be not later than
ten years from the date such Option is granted.  Except where earlier
termination is required by the terms of the Option, all Options shall terminate
and expire upon the first to occur of the following events:

          (a) the expiration of 30 days from the date of such Participant's
     termination of employment (other than by reason of death), except that if
     the Participant is disabled (within the meaning of Section 22(e)(3) of the
     Internal Revenue Code) at the time of his termination of employment, the
     expiration of one year from the date of the Participant's termination of
     employment;

          (b) the expiration of 180 days from the date of the death of such
     Participant if his death occurs while he is employed by the Company or any
     of its subsidiaries; or

          (c) the termination of the Option pursuant to Section 11 of the Plan.

     The termination of employment of a Participant by death or otherwise shall
not accelerate or otherwise affect the number of shares with respect to which an
Option may be exercised, and the Option may only be exercised with respect to
that number of shares which could have been purchased under the Option had the
Option been exercised by the Participant on the date of such termination.

     For purposes of the above, in the case of Options granted to Participants
who are directors of the Company or consultants or advisors to the Company,
"employment" shall mean service as such director, consultant or advisor to the
Company.

     SECTION 14.  Withholding of Taxes.  The Company shall deduct and withhold
from the wages, salary, bonus and other income paid by the Company to the
Participant the requisite tax upon the amount of taxable income, if any,
recognized by the Participant in connection with the exercise in whole or in
part of any Option or the sale of Common Stock issued to the Participant upon
exercise of the Option, all as may be required from time to time under any
federal or state tax laws and regulations.  This withholding of tax shall be
made from the Company's concurrent or next payment of wages, salary, bonus or
other income to the Participant or by payment to the Company by the Participant
of the required withholding tax, as the Board may determine.

     SECTION 15.  Termination of Plan.  The Plan shall terminate when all
Options granted hereunder either have been fully exercised, and all shares of
Common Stock which may be purchased pursuant to the exercise of such Options
have been so purchased, or have expired, and in any event not later than ten
(10) years from the date of the adoption of the plan or the date of the approval
of the Plan by the shareholders of the Company, whichever is earlier.  However,
the Board may in its absolute discretion terminate the Plan at any time.  No
such termination, other than as provided for in Section 11 hereof, shall in any
way affect any Option then outstanding.

                                       4
<PAGE>
 
     SECTION 16.  Amendment of Plan. The Board may at any time amend or
terminate this Plan. However, no amendment or termination may impair the rights
of the Participant holding an Option without the Participant's consent. Also,
except as may otherwise be permitted under Rule 16b-3 promulgated by the
Securities and Exchange Commission, no amendment to the Plan may be adopted
without the approval of the shareholders that would materially (a) increase the
number of shares that may be issued to Participants subject to Section 16 of the
Securities Exchange Act of 1934 ("Insiders"), (b) increase the benefits accruing
to Insiders, or (c) modify the requirements for Insiders to participate.

     Further, the approval of shareholders must also be obtained if the Plan is
amended in a way that relates to the class of individuals entitled to receive
Incentive Stock Options, or the aggregate number of shares of Common Stock that
may be issued under the Plan.

     SECTION 17.  Amendment of Options.  The Board may modify an existing
Option, including the right to (a) change the exercise price, (b) accelerate the
right to exercise it, (c) extend or renew it, or (d) cancel it and issue a new
Option.  However, no modification may be made to an Option that would impair the
rights of the Participant holding the Option without his consent.  Whether a
modification of an existing Incentive Stock Option will be treated as the
issuance of a new Incentive Stock Option will be determined in accordance with
the rules of Code Section 424(h).  Whether a modification of an existing Option
granted to an Insider will be treated as a new grant for purposes of Section 16
of the Securities Exchange Act of 1934 will be determined in accordance with
Rule 16b-3.

                                       5
<PAGE>
 
                                  RULES OF THE
                     PLASMA & MATERIALS TECHNOLOGIES, INC.
                           (UNITED KINGDOM COMPANIES)

                              SHARE OPTION SCHEME

1.   DEFINITIONS

1.1  In these Rules the following words and expressions shall have the following
meanings:

     "Announcement Date"   the date on which the annual or half-yearly results 
                           of the Company are announced.

     "Appropriate Period"  the meaning given in Paragraph 15(2) of Schedule 9.

     "Approval Date"       the date on which the Scheme is approved by the Board
                           of Inland Revenue under Schedule 9.

     "Associated Company"  has the same meaning in Section 416 of ICTA 1988.

     "Auditors"            the auditors for the time being of the Company 
                           (acting as experts and not as arbitrators).

     "Board"               the Board of Directors of the Company or, except in
                           Rule 10.4, a duly constituted committee thereof.

     "Company"             Plasma & Materials Technologies, Inc.

     "Control"             has the same meaning as in Section 840 of ICTA 1988.

                                       1
<PAGE>
 
     "Dealing Day"         a day on which the Stock Exchange is open for the
                           transaction of business.

     "Date of Grant"       the date on which an Option is, was, or is to be
                           granted under the Scheme.

     "Eligible Employee"   any director of any Participating Company who is
                           required to devote to his duties not less than 25
                           hours per week (excluding meal breaks) or any
                           employee (other than one who is a director) of any
                           Participating Company, provided that the director or
                           employee is not precluded by paragraph 8 of Schedule
                           9 from participating in the Scheme.

     "ICTA 1988"           The Income and Corporation Taxes Act 1988.

     "Market Value"        on any day the average of the middle market 
                           quotations of a Share as derived from the Daily
                           Official List of The Stock Exchange for the 3
                           immediately preceding Dealing Days. (Provided that if
                           the Dealing Days do not fall within the period
                           specified in Rule 2, only such days as do fall within
                           that period will be taken into account in arriving at
                           the Market Value or, if not applicable, on any day
                           the market value of a Share determined in accordance
                           with the provisions of Part VIII of the Taxation of
                           Chargeable Gains Act 1992 and agreed for the purposes
                           of the Scheme with the Inland Revenue Shares
                           Valuation Division on or before that day.)

     "Option"              a right to acquire Shares granted (or to be granted) 
                           in accordance with the Rules of this Scheme.

                                       2
<PAGE>
 
     "Option Holder"          an individual to whom an Option has been granted 
                              or his personal representatives.

     "Participating Company"  the Company and any other company of which the
                              Company has Control and which is for the time
                              being nominated by the Board to be a Participating
                              Company.

     "Schedule 9"             Schedule 9 ICTA 1988.

     "Scheme"                 the employee share option scheme constituted and
                              governed by these rules as from time to time 
                              amended.

     "Share"                  a share of Common Stock of the Company which 
                              satisfies the conditions specified in paragraphs
                              10-14 inclusive of Schedule 9.

     "Subscription Price"     the price at which each Share subject to an Option
                              may be acquired on the exercise of that Option
                              determined in accordance with Rule 2.

     "Subsisting Option"      an option which has neither lapsed nor been 
                              exercised.

1.2  Where the context so admits the singular shall include the plural and vice
     versa and the masculine shall include the feminine.

1.3  Any reference in the Scheme to any enactment includes a reference to that
     enactment as from time to time modified, extended or re-enacted.

                                       3
<PAGE>
 
2.   INVITATION TO APPLY FOR OPTIONS

2.1  At any time or times within a period of four weeks after an Announcement
     Date or the Approval Date, and in any case not earlier than the Approval
     Date nor later than the tenth anniversary thereof, the Board may in its
     absolute discretion select any number of individuals who may at the
     intended Date of Grant be Eligible Employees and invite them to apply for
     the grant of Options to acquire Shares in the Company.

2.2  Each invitation shall specify:

     i)   the date (being neither earlier than 7 nor later than 14 days after 
          the issue of the invitation) by which an application must be made,

     ii)  the maximum number of Shares over which that individual may on that
          occasion apply for an Option, being determined at the absolute
          discretion of the Board save that it shall not be so large that the
          grant of the Option over that number of Shares would cause the limit
          specified in Rule 5.2 to be exceeded, and

     iii) the Subscription Price at which Shares may be acquired on the
          exercise of any Option granted in response to the application.

2.3  Each invitation shall be accompanied by an application in such form, not
     inconsistent with these Rules, as the Board may determine.

2.4  i)   The Subscription Price shall not be less than the nominal value of a
          Share, and

     ii)  Subject to Rule 8, the Subscription Price shall not be less than the
          Market Value of a Share on the day the invitation to apply for an
          Option was issued pursuant to Rule 2.1.

                                       4
<PAGE>
 
3.   APPLICATIONS FOR OPTIONS

3.1  Not later than the date specified in the invitation each Eligible Employee
     to whom an invitation has been issued in accordance with Rule 2 above may
     apply to the Board, using the application form supplied, for an Option over
     a number of Shares not exceeding the number specified in the invitation.

3.2  Each application shall be accompanied by a payment of (Pounds)1 in
     consideration for the Option to be granted.

4.   GRANT OF OPTIONS

4.1  Not later than the twenty-first day following the issue of invitations the
     Board may grant to each applicant who is still an Eligible Employee an
     Option over the number of Shares specified in his application.

4.2  As soon as possible after Options have been granted the Board shall issue
     an option certificate in respect of each Option in such form, not
     inconsistent with these Rules, as the Board may determine.

4.3  No Option may be transferred, assigned or charged and any purported
     transfer, assignment or charge shall cause the Option to lapse forthwith.
     Each option certificate shall carry a statement to this effect.

5.   LIMITATIONS ON GRANTS

5.1  No Options shall be granted pursuant to Rule 4 above if such grant would
     result in the aggregate of:

     i)   the number of Shares over which Subsisting Options have been granted
          under this Scheme, and

     ii)  the number of Shares which have been issued on the exercise of Options
          granted under this Scheme,

                                       5
<PAGE>
 
     exceeding 800,000 Shares.

5.2  Any option granted to an Eligible Employee shall be limited to take effect
     so that the aggregate Market Value of Shares subject to that Option, when
     aggregated with the Market Value of shares subject to Subsisting Options,
     shall not exceed (Pounds)30,000.


5.3  For the purposes of Rule 5.2:

     i)   Options shall include all Options granted under this Scheme and all
          options granted under any other scheme, not being a savings-related
          share option scheme, approved under Schedule 9 and established by the
          Company or any Associated Company thereof.

     ii)  The Market Value of shares shall be calculated as at the time the
          Options in relation to those shares were granted or such earlier time
          as may have been agreed in writing with the Board of Inland Revenue.

6.   EXERCISE OF OPTIONS

6.1  Subject to Rule 9 below and provided always that at all times the Option
     has not lapsed it may be exercised in whole or in part in five (5) equal
     cumulative annual installments commencing one year after the Date of Grant
     or in such other installments and/or at such other intervals as may be
     specified in the invitation to apply for the grant of the Option.

6.2  An Option shall lapse on the latest of the following events:

     i)   the Option Holder ceasing to be employed by a Participating Company;
          and, the earliest of:

                                       6
<PAGE>
 
     ii)  the tenth anniversary of the Date of Grant, or such shorter period as
          may be specified in the invitation to apply for the grant of the
          Option,

     iii) the expiration of 180 days from the Option Holder's death if his
          death occurs while he is employed by any Participating Company,

     iv)  the expiration of 30 days following the Option Holder ceasing to be a
          director or employee of any Participating Company, other than by
          reason of his death, except that if Option Holder is disabled at the
          time he ceases to be a director or employee, the expiration of one
          year from the date of termination,

     v)   unless a release has been effected under Rule 7.4, six months after 
          the Option has become exercisable in accordance with Rule 7, and

     vi)  the Option Holder being adjudicated bankrupt.

6.3  The termination of Employment of an Option Holder by death or otherwise
     shall not accelerate or otherwise affect the number of Shares with respect
     to which an Option may be exercised, and the Option may only be exercised
     with respect to that number of Shares which could have been purchased under
     the Option had the Option been exercised by the Option Holder on the date
     of such termination.

7.   TAKEOVERS AND LIQUIDATIONS

7.1  If any person obtains Control of the Company as a result of making:

     i)   a general offer to acquire the whole of the issued share capital of 
          the Company which is made on a condition such that if it is satisfied
          the person making the offer will have Control of the Company, or

                                       7
<PAGE>
 
     ii)  a general offer to acquire all the shares in the Company which are 
          of the same class as the Shares,

     then any Subsisting Option may subject to Rule 7.4 below be exercised
     within six months of the time when the person making the offer has obtained
     Control of the Company and any condition subject to which the offer is made
     has been satisfied.

7.2  If under Section 425 of the Companies Act 1985 or any provisions of United
     States law having similar effect the Court sanctions a compromise or
     arrangement proposed for the purposes of or in connection with a scheme for
     the reconstruction of the Company or its amalgamation with any other
     company or companies, any Subsisting Option may subject to Rule 7.4 below
     be exercised within six months of the Court sanctioning the compromise or
     arrangement.

7.3  If any person becomes bound or entitled to acquire shares in the Company
     under Section 428 to 430 of the said Act of 1985 or Articles 421 to 423 of
     the said Order of 1986 or any provisions of United States law having
     similar effect any Subsisting Option may subject to Rule 7.4 below be
     exercised at any time when that person remains so bound or entitled.

7.4  If as a result of the events specified in Rules 7.1 or 7.2 a company has
     obtained Control of the Company, or if a company has become bound or
     entitled as mentioned in Rule 7.3, the Option Holder may, by agreement with
     that other company (the "Acquiring Company"), within the Appropriate
     Period, release each Subsisting Option (the "Old Option") for an option
     (the "New Option") which satisfies the conditions that it:

     i)   is over shares in the Acquiring Company or some other company falling
          within paragraph (b) or paragraph (c) of Paragraph 10, Schedule 9
          which satisfy the conditions specified in Paragraphs 10 to 14
          inclusive of Schedule 9.

                                       8
<PAGE>
 
     ii)  is a right to acquire such number of such shares as has on acquisition
          of the New Option an aggregate Market Value equal to the aggregate
          Market Value of the shares subject to the Old Option on its release,

     iii) has a subscription price per share such that the aggregate price
          payable on the complete exercise equals the aggregate price which
          would have been payable on complete exercise of the Old Option, and

     iv)  is otherwise identical in terms to the Old Option.

     The New Option shall, for all other purposes of this scheme, be treated as
     having been acquired at the same time as the Old Option.

     Where any New Options are granted pursuant to this clause 7.4, Rules 4.3,
     6, 7, 8, 9, 10.1 and 10.3 to 10.6 shall, in relation the New Options, be
     construed as if references to the Company and to the Shares were references
     to the Acquiring Company or, as the case may be, to the other company to
     whose shares the New Options relate, and to the shares in that other
     company, but reference to Participating Company shall continue to be
     construed as if references to the Company were references to Plasma &
     Materials Technologies, Inc.

7.5  If the Company passes a resolution for voluntary winding up, any Subsisting
     Option may be exercised within six months of the passing of the resolution.

7.6  For the purposes of this Rule 7, other than Rule 7.4, a person shall be
     deemed to have obtained Control of a Company if he and others acting in
     concert with him have together obtained Control of it.

7.7  The exercise of an Option pursuant to the preceding provisions of this Rule
     7 shall be subject to the provisions of the Rule 9 below.

                                       9
<PAGE>
 
7.8  Where in accordance with Rule 7.4 Subsisting Options are released and New
     Options granted the New Options shall not be exercisable in accordance with
     Rule 7.1, 7.2 and 7.3 above by virtue of the event by reason of which the
     New Options were granted.

8.   VARIATION OF SHARE CAPITAL

In the event of any variation of the share capital of the Company by way of
capitalization or rights issue, consolidation, subdivision or reduction of
capital or otherwise, the number of Shares subject to any Option and the
Subscription Price for each of those Shares shall be adjusted in such manner as
the Auditors confirm in writing to be fair and reasonable provided that:

     i)   the aggregate amount payable on the exercise of an Option in full is
          not increased,

     ii)  the Subscription Price for a Share is not reduced below its nominal
          value,

     iii) no adjustment shall be made without the prior approval of the Board
          of Inland Revenue, and

     iv)  following the adjustment the Shares continue to satisfy the conditions
          specified in paragraphs 10 to 14 inclusive of Schedule 9.

9.   MANNER OF EXERCISE OF OPTIONS

9.1  No Option may be exercised by an individual at any time when he is
     precluded by paragraph 8 of Schedule 9 from participating in the Scheme.

9.2  No Option may be exercised at any time when the shares which may be thereby
     acquired do not satisfy the conditions specified in paragraphs 10-14 of
     Schedule 9.

                                      10
<PAGE>
 
9.3  An Option shall be exercised by the Option Holder giving notice to the
     Company in writing of the number of Shares in respect of which he wishes to
     exercise the Option accompanied by the appropriate payment and the relevant
     option certificate and shall be effective on the date of its receipt by the
     Company.

9.4  Shares shall be allotted and issued or transferred pursuant to a notice of
     exercise within 30 days of the date of exercise and a definitive share
     certificate issued to the Option Holder in respect thereof.  Save for any
     rights determined by reference to a date preceding the date of allotment or
     transfer, such Shares shall rank pari passu with the other shares of the
     same class in issue at the date of allotment.

9.5  When an Option is exercised only in part, the balance shall remain
     exercisable on the same terms as originally applied to the whole Option and
     a new option certificate shall be issued accordingly by the Company as soon
     as possible after the partial exercise.

10.  ADMINISTRATION AND AMENDMENT

10.1 The Scheme shall be administered by the Board whose decision on all
     disputes shall be final.

10.2 The Board may from time to time amend these Rules provided that:

     i)   no amendment may materially affect an Option Holder as regards an
          Option granted prior to the amendment being made,

     ii)  no amendment may be made which would make the terms on which Options
          may be granted materially more generous or would increase the limit
          specified in Rule 5.1 without the prior approval of the Company in
          general meeting, and

     iii) no amendment shall have effect until approved by the Board of Inland
          Revenue.

                                      11
<PAGE>
 
10.3 The cost of establishing and operating the Scheme shall be borne by the
     Participating Companies in such proportions as the Board shall determine.

10.4 The Board may establish a committee consisting of not less than three Board
     members to whom any or all of its powers in relation to the Scheme may be
     delegated.  The Board may at any time dissolve the Committee, alter its
     constitution or direct the manner in which it shall act.

10.5 Any notice or other communication under or in connection with the Scheme
     may be given by the Company either personally or by post and to the Company
     either personally or by post to the secretary; items sent by post shall be
     prepaid and shall be deemed to have been received 72 hours after posting.

10.6 The Company shall at all times keep available sufficient authorised and
     unissued Shares or shall otherwise procure that sufficient issued Shares
     are available for transfer to satisfy the exercise to the full extent still
     possible of all Options which have neither lapsed nor been fully exercised,
     taking account of any other obligations of the Company to issue unissued
     Shares.

                                      12
<PAGE>
 

                   SHARE OPTION AND REIMBURSEMENT AGREEMENT

          This Agreement Regarding Share Options ("Agreement") is entered into
by and between PLASMA & MATERIALS TECHNOLOGIES, INC., a California corporation
("PMT") and each of the companies identified on the signature pages to this
Agreement (each, a "Company" and collectively, the "Companies").

                                   RECITALS
                                   --------

          A.   PMT owns, directly or indirectly, all of the issued and
outstanding shares of each of the Companies.

          B.   Each of the Companies desires to reward certain employees whose
services have contributed significantly to the success of the Companies and to
motivate those employees to continue in their employment by granting such
employees options to purchase shares of PMT, a company whose shares are publicly
traded.

          C.   PMT is willing to grant options over a maximum of 800,000 shares
of its common stock to certain employees of the Companies on terms similar to
those contained in the Plasma & Materials Technologies 1991 Stock Option Plan
(the "PMT Stock Option Plan").

          D.   The Companies having employees within the United Kingdom desire
that PMT grant the foregoing options pursuant to the terms of a stock option
plan ("Share Option Scheme") that is approved by the U.K Inland Revenue.  The
Companies with employees outside of the United Kingdom or with employees within
the United Kingdom who may be granted options exceeding the amount permitted by
the Share Option Scheme desire that PMT grant options pursuant to the PMT Stock
Option Plan.

          E.   PMT is willing to adopt and administer the Share Option Scheme
and grant options to the employees of the Companies under the Share Option
Scheme and the PMT Stock Option Plan, on the terms and subject to the conditions
of this Agreement.

                                   AGREEMENT
                                   ---------

          NOW, THEREFORE, in consideration of the foregoing and the covenants,
agreements, and conditions contained herein, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:

          1.   Adoption of Share Option Scheme/PMT Stock Option Plan.  PMT
               -----------------------------------------------------      
hereby agrees to grant options over a maximum of 800,000 shares of its common
stock to certain employees of the Companies to assist the Companies in rewarding
and retaining employees whose efforts contribute to the success of the
Companies.  Subject to the terms and conditions set forth below, each of the
parties hereby approves, adopts, ratifies, and agrees to be bound  by the Share
Option Scheme, substantially in the form attached to this
<PAGE>
 
Agreement as Exhibit A-1, and the PMT Stock Option Plan, a copy of which is
attached as Exhibit A-2, as applicable.

          2.   Administration.
               -------------- 

               (a) General.  The Companies acknowledge and agree that the Share
                   -------                                                     
Option Scheme will be administered under the general direction of the Board of
Directors of PMT, and any duly appointed committees of the Board.

               (b) Special Committee.  Pursuant to Section 10.4 of the Share 
                   -----------------                                          
Option Scheme and Section 4 of the PMT Stock Option Plan, PMT hereby establishes
a committee to administer the Share Option Scheme and the PMT Stock Option Plan
insofar as either relates to the grant of options to employees of the Companies.
The committee shall be comprised of Mr. Christopher D. Dobson, representing the
Companies, and two members of the Board of Directors of PMT to be named
("Committee"). The Committee shall review the employees selected by each Company
to receive options and determine the number of shares of common stock over which
options will be granted, the subscription price therefor, and whether the
options will be granted under the Share Option Scheme or the PMT Stock Option
Plan, in each case in accordance with the terms of such scheme or plan.

               (c) Notification of Awards.  The Committee shall promptly notify 
                   ----------------------                                     
each Company of its decision to award share options to an employee or employees
of that Company and the terms on which such award will be made. In the case of
awards under the Share Option Scheme, a Company so notified shall thereupon
invite the designated employee or employees to apply for a grant of options
under the Share Option Scheme. Such invitation shall be in the form of the
Letter of Invitation attached to this Agreement as Exhibit B-1 and be
accompanied by an Application Form, substantially in the form attached as
Exhibit B-2. In all other cases, a Company so notified shall cooperate with the
Committee in advising employees of such awards in whatever manner the Committee
may determine.

               (d) Option Certificate.  In the case of awards under the Share 
                   ------------------                                         
Option Scheme, upon receipt of an Application Form and payment of the option
premium specified in the Share Option Scheme, the Company receiving such
application shall immediately transmit the application to the Committee via
facsimile and international courier. The Committee shall thereupon grant to the
employee applying therefor an option ("Option") over the number of shares
specified in the application and, as soon as practicable thereafter, issue to
the employee an Option Certificate substantially in the form attached to this
Agreement as Exhibit C-1, with a copy to the employer-Company. The Option
Certificate shall be accompanied by a Notice of Exercise of Option,
substantially in the form attached as Exhibit C-2, to be used by the employee to
notify PMT of his or her intention to exercise the Option under the Share Option
Scheme. In all other cases, the Committee shall deliver a written stock option
to the employee in the form prescribed under the PMT Stock Option Plan and a
Notice of Exercise of Option. (For convenience, this written stock option shall
also be referred to as an "Option Certificate".)

                                       2
<PAGE>
 
               (e) Deemed Delivery.  The delivery by an employee of an 
                   ---------------                                          
Application Form or Notice of Exercise of Option to his or her employer shall be
deemed delivery to PMT of such application or notice for purposes of the Share
Option Scheme.

          3.   Exercise of Share Options.
               ------------------------- 

               (a) Notice.  An employee who wishes to exercise his or her Option
                   ------                                                       
shall do so by completing, signing, and delivering a Notice of Exercise of
Option to PMT care of his or her employer-Company together with payment of the
subscription price in full for the shares specified in the notice.  The Option
shall be deemed exercised on the date that the employer-Company receives such
notice and payment (the "Effective Date").  The employer-Company shall promptly
(i) forward such notice to PMT via facsimile and international courier and (ii)
confirm in writing that the employee is then employed by such Company or, if
not, the date of and reason for termination.

               (b) Issuance of Shares.  Within thirty (30) days after the 
                   ------------------                                         
Effective Date, PMT shall issue a share certificate to the employee representing
the number of shares, fully paid and non-assessable, specified in the employee's
Notice of Exercise of Option. If an employee exercises an option as to only part
of the shares covered thereby, PMT shall also issue a new Option Certificate
covering the balance of the option shares, which option shall remain exercisable
on the same terms as originally applied to the whole Option.

               (c) Payment.  In consideration of the issuance of shares to an
                   -------                                                   
employee(s) of a Company, as soon as practicable after the Effective Date, the
employer-Company shall pay to PMT in U.S. dollars, by bank wire transfer, an
amount equal to the sum of (i) the total subscription price paid by the employee
(translated to U.S. dollars at the exchange rate published in the Wall Street
Journal on the Effective Date), plus (ii) the amount computed by multiplying the
number of shares issued to the employee by the highest closing price quoted for
PMT common stock during the thirty (30) day period ending on the Effective Date
less the subscription price paid by the employee.

               (d) Securities Registration.  Each of the Companies whose 
                   -----------------------                                    
employees have been granted options under the Share Option Scheme and/or PMT
Stock Option Plan shall cooperate with PMT in complying with any and all
applicable securities regulations upon the issuance of shares to employees under
such plans and shall promptly reimburse PMT for a proportionate share of the
expenses incurred in complying with such regulations.

          4.   Other Terms.
               ----------- 

               (a) Notices.  Except as otherwise provided herein, all notices,
                   -------                                                    
requests, consents and other communications required or permitted hereunder
shall be in writing and shall be hand-delivered, deposited prepaid for next day
delivery by Federal Express or other similar overnight courier, mailed airmail,
first class postage prepaid,

                                       3
<PAGE>
 
registered or certified mail, or transmitted by facsimile to the parties at the
addresses and numbers listed on Exhibit D attached to this Agreement.  Such
notices, requests, consents and other communications shall for all purposes of
this Agreement be treated as being effective or having been given, if delivered
personally, upon delivery, if delivered by overnight courier, upon twenty-four
(24) hours after deposit, or, if sent by mail, upon the earlier of actual
receipt or the fifth day after the same has been deposited in a regularly
maintained receptacle for the deposit of mail, and postage prepaid and addressed
as set forth above.

               (b) Severability.  Whenever possible, each provision of this 
                   ------------                                                
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

               (c) Waiver and Amendment.  No amendment, modification, 
                   --------------------                                       
termination or waiver of any provision of this Agreement shall be effective
unless the same shall be in writing and signed by each party, and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

               (d) Parties in Interest.  All of the terms and provisions of this
                   -------------------                                          
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties.

               (e) Governing Law; Jurisdiction.  This Agreement shall be 
                   ---------------------------                           
governed by and construed in accordance with the laws of the State of
California, without reference to conflicts of law principles.

               (f) Entire Agreement.  This Agreement embodies the entire 
                   ----------------                                            
agreement and understanding of the parties in respect of the subject matter
contained herein and supersedes all prior negotiations, agreements and
understandings among the parties with respect to such subject matter. There are
no restrictions, promises, representations, warranties, covenants, or
undertakings, other than those expressly set forth or referred to in this
Agreement.

               (g) Counterparts.  This Agreement may be executed in 
                   ------------                                               
counterparts with the same effect as if all parties had signed the same
document. All counterparts so executed shall be deemed to be an original, shall
be construed together and shall constitute one agreement.

                                       4
<PAGE>
 
               (h) Captions.  The captions in this Agreement are for convenient
                   --------                                                    
reference only and shall have no legal effect.

               (i) Due Authorization.  Each of the parties hereby represents and
                   -----------------                                            
warrants that this Agreement has been duly executed and delivered by an
authorized representative of such party.

               (j) Conflicts.  In the event of any discrepancy between this 
                   ---------                                            
Agreement and the Share Option Scheme, the Share Option Scheme shall prevail.

               (k) Incorporation By Reference.  Every Exhibit attached and 
                   --------------------------                                 
referred to in this Agreement is incorporated herein by reference as though
fully set forth in the main body of this Agreement.

                           [Signature Pages Follow]

                                       5
<PAGE>
 
          IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective on and as of the date first written above.


PMT:                     PLASMA & MATERIALS TECHNOLOGIES, INC.,
                         a California corporation



                         By: /s/
                            __________________________________________
                         Its:_________________________________________


COMPANIES:               ELECTROTECH LIMITED.,
                         an English corporation



                         By: /s/
                            __________________________________________
                         Its:_________________________________________


                         ELECTROTECH EQUIPMENTS LIMITED.,
                         an English corporation



                         By: /s/
                            __________________________________________
                         Its:_________________________________________



                         ELECTROTECH (ASIA) LIMITED,
                         an English corporation



                         By: /s/
                            __________________________________________
                         Its:_________________________________________



                         (Signatures Continued)

                                       6
<PAGE>
 
                         ELECTROTECH INTERNATIONAL LIMITED,
                         an English corporation



                         By: /s/
                            __________________________________________
                         Its:_________________________________________



                         E.T. FABRICATIONS LIMITED,
                         an English corporation



                         By: /s/
                            __________________________________________
                         Its:_________________________________________


 
                         E.T. ELECTROTECH RESEARCH LIMITED,
                         an English corporation



                         By: /s/
                            __________________________________________
                         Its:_________________________________________



                         E.T. EQUIPMENTS LIMITED,
                         an English corporation



                         By: /s/
                            __________________________________________
                         Its:_________________________________________

                         (Signatures Continued)

                                       7
<PAGE>
 
                         VACUUM CONTROL SYSTEMS LTD,
                         an English corporation

                         By: /s/
                            __________________________________________
                         Its:_________________________________________


                         ELECTROTECH EQUIPMENTS, GmbH,
                         a German limited liability company



                         By: /s/
                            __________________________________________
                         Its:_________________________________________



                         ELECTROTECH EQUIPMENTS, SARL,
                         a French limited liability company



                         By: /s/
                            __________________________________________
                         Its:_________________________________________


EXHIBITS

Exhibit "A-1" -- Share Option Scheme
Exhibit "A-2" -- PMT Stock Option Plan
Exhibit "B-1" -- Form of Letter of Invitation
Exhibit "B-2" -- Form of Application
Exhibit "C-1" -- Form of Option Certificate
Exhibit "C-2" -- Form of Notice of Exercise
Exhibit "D"   -- Addresses of Parties

                                       8